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DRDGOLD LIMITED - Report to shareholders for the quarter ended 30 September 2014 (Q1 FY2015)

Release Date: 24/10/2014 08:00
Code(s): DRD04 DRD     PDF:  
Wrap Text
Report to shareholders for the quarter ended 30 September 2014 (Q1 FY2015)

DRDGOLD LIMITED
(Incorporated in the Republic of South Africa)
Registration No.1895/000926/06
JSE share code: DRD
Interest rate issuer: DRDI
ISIN: ZAE 000058723
Issuer code:DUSM
NYSE trading symbol: DRD
("DRDGOLD" or "the company")


REPORT TO SHAREHOLDERS FOR THE QUARTER ENDED 30 SEPTEMBER 2014 (Q1 FY2015)


GROUP RESULTS: KEY FEATURES
Q1 FY2015 VS Q4 FY2014                          Q1 FY2015 VS Q1 FY2014
- Gold production up 8% to 37 005 oz            - Gold production up 10% to 37 005 oz
- Operating profit up 52% to R79.7 million      - Operating profit up 11% to R79.7 million 
- Cash balance steady net of loan retirement    - AISC down 9% to USD1 237/oz
- Wage settlement extended until 2016           - EBITDA up 87% to R48.0 million

REVIEW OF OPERATIONS
        
                                                                                               %                                    
                                                                                          change        Quarter       % Change      
                                                           Quarter       Quarter      Q1 2015 vs       Sep 2013        Q1 2015      
Group                                                     Sep 2014      Jun 2014         Q4 2014      Restated*     vs Q1 2014      
Gold production                                   oz        37 005        34 143               8         33 597             10      
                                                  kg         1 151         1 062               8          1 045             10      
Gold sold                                         oz        38 291        32 857              17         36 394              5      
                                                  kg         1 191         1 022              17          1 132              5      
Cash operating costs                      USD per oz         1 085         1 120             (3)          1 164            (7)      
                                          ZAR per kg       375 044       379 039             (1)        373 433              –      
All-in sustaining costs                   USD per oz         1 237           999              24          1 362            (9)      
                                          ZAR per kg       427 631       339 315              26        436 954            (2)      
Average gold price received               USD per oz         1 284         1 293             (1)          1 333            (4)      
                                          ZAR per kg       443 760       437 770               1        427 604              4      
Operating profit                         ZAR million          79.7          52.6              52           72.0             11      
Cash operating margin                              %            15            13              15             13             22      
All-in sustaining costs margin                     %             4            22            (84)            (2)            266      
EBITDA#                                  ZAR million          48.0         114.1            (58)           25.7             87      
Headline (loss)/earnings                 ZAR million         (1.1)          37.4           (103)         (14.8)             93      
                                 ZAR cents per share             –            10           (104)            (4)             99      
     

* Refer to note 2 restatements.
# EBITDA refers to earnings before interest, tax, depreciation, amortisation and impairments of subsidiaries and includes 
attributable share of earnings before interest, tax, depreciation, amortisation and impairment of equity accounted investments.
                                                                                                                                    
SHAREHOLDERS INFORMATION
                                                                                                            
Issued capital                                                                                                                      
385 383 767 ordinary no par value shares                                                                                                                                   
6 155 559 treasury shares held within the group                                                                                     
5 000 000 cumulative preference shares                                                                                              
Total ordinary no par value shares issued and committed: 386 621 795                                                                

MARKET CAPITALISATION                    
As at 30 September 2014   (ZARm)   1 479.9      
As at 30 September 2014   (USDm)     131.0 

As at 30 June 2014        (ZARm)   1 175.4      
As at 30 June 2014        (USDm)     114.5      


STOCK TRADED                                                   JSE         NYSE*
Average volume for the quarter per day ('000)                  587         1 704
% of issued stock traded (annualised)                           40           115
Price - High                                                R 4.03      USD0.365
      - Low                                                 R 2.52      USD0.237
      - Close                                               R 3.84      USD0.340
* This data represents per share data and not ADS data – one ADS reflects 10 ordinary shares.

DEAR SHAREHOLDER                                                            
                                                                           
I am pleased to report an improvement in a number of key                   
performance indicators:                                                    
                                                                           
-  gold production improved by another 8%, quarter-on-quarter.             
   Compared to the March quarter (30 126oz) the positive swing             
   was 23% or 6 879oz;                                                     
                                                                           
-  net cash inflow from operations rose to R86.6 million. This enabled     
   us to pay down R73.3 million in debt that was due in July, and          
   maintain a cash balance of R204 million; and                            
                                                                      
-  total all-inclusive cash expenditure for the quarter - including all
   operational and corporate cash costs and capital expenditure, excluding 
   repayments of borrowings - reduced to R415 659/kg from R430 243/kg for an 
   all-in cash margin of 67%.                                                      
                                                                           
The carbon adsorption inefficiencies and throughput issues that            
plagued the initial start-up of the flotation and fine-grind circuit       
(FFG) did not manifest this time round, and inventory build-up in          
the FFG impacted gold output exactly as anticipated.                       
                                                                           
We track five important indicators in the FFG test-work:                   
                                                                           
-  the efficiency of the float circuit, targeting a mass pull of 3.5 to 4% of 
   throughput and containing at least 40% of the gold contained in the feed.  
   This target was achieved early on in test work and is being maintained;        
                                                                           
-  the efficiency of the mills, targeting a reduction in size of the mill  
   feed to between 20 and 22 microns, while not exceeding a certain        
   grinding media consumption rate. Although the grind is within           
   specification, the media consumption rate is still higher than we                                                             
   are targeting and we intend to run a number of further tests in                                                     
   this regard;                                                            
                                                                           
-  leach and carbon adsorption efficiency. Our carbon efficiencies         
   are trending very favourably and dissolved losses are within            
   specification. We do believe that the combined leach and carbon         
   efficiency will benefit from a different leach and adsorption           
   configuration. We will test this assumption during October and if       
   this turns out to be correct, a minor engineering adjustment will       
   be made to bring about the re-configuration;                            
                                                                           
-  the effect of the FFG on the down-stream low grade CIL circuit. An
   initial concern was that the reagents used in the float cells could           
   impact carbon adsorption efficiencies downstream. We have not,          
   as yet, seen any adverse effects and are closely monitoring this to     
   keep the low grade CIL in steady state; and                             
                                                                           
-  washed residue value trends. Ultimately the purpose of the FFG          
   is to free up more of the gold that previously remained stuck in 
   solids. The washed residues value, which is the assay value of solids
   leaving the plant, is the ultimate test that the mills are doing their
   job. Our target is to drop the washed residue grade by 0.03g of
   gold per tonne. While it is still early days and we have not as yet
   obtained an adequate number of consistent samples to declare
   success, early trends are promising and increasingly consistent
   with the outcomes that the float and grind efficiencies suggest
   we ought to expect.
                                                       
   Q1 2015 VS Q4 2014

   Operational review
   Gold production rose by 8% quarter on quarter to 37 005oz,
   benefiting from a 12% increase in the average yield to 0.194g/t that              
   offset a small reduction in volume throughput.
   
   Gold sold was 17% higher at 38 291oz, a consequence of the sale
   during the September quarter of 1 286oz of gold produced in the
   June quarter.
   
   Cash operating costs were 1% lower at R375 044/kg mainly due
   to higher gold production, notwithstanding an increase in the local
   authority's power tariff from 1 July and annual wage increments.
                                                                    
   All-in sustaining costs were 26% higher at R427 631/kg. This increase is
   due mainly to the impact of a favourable R94.7 million decrease in 
   environmental costs, credited to the statement of profit and loss in the
   previous quarter. This is explained in greater detail in note 7, below.
   
   Total all-inclusive cash expenditure for the quarter, including all
   operational and corporate cash costs and capital expenditure,                     
   excluding only the R73.3 million loan note repayment in July, was                 
   R478.4 million. This translates into all-inclusive cash expenditure
   of R415 659/kg of gold produced, down from R430 234/kg in the
   previous quarter.
   
   We consider this to be an important measure to enable us to track
   all in break-even costs and the net cash flows of the business.
   
   Capital expenditure was 18% lower at R16.6 million, reflecting both
   completion of all major projects and specific planning to reduce
   capital expenditure during the winter months.

   Financial review                                                                  
   Revenue increased by 18% to R528.5 million due to the increases in
   gold production and gold sold, and a 1% rise in the average rand gold
   price received to R443 760/kg.

   Operating profit was 52% higher at R79.7 million after accounting           
   for cash operating costs, 7% higher at R431.7 million.

   However a R2.0 million charge for environmental rehabilitation in the quarter 
   under review, compared with a R94.7 million benefit in the previous quarter, 
   together with retrenchment costs of R5.8 million compared with R1.0 million, 
   resulted in a 73% reduction in gross profit to R25.6 million.    
                                                                               
   After accounting for other expenses and taxation, a loss of                 
   R4.7 million was recorded, compared with a profit of R7.9 million in    
   the previous quarter.                                                       
                                                                               
   The cash operating margin increased to 15% from 13%, and the all-                                                                         
   in sustaining costs margin declined from 22% to 4%. The all-in cost    
   cash margin was 6.7%. 

   Earnings before interest, taxation, depreciation and amortisation 
   (EBITDA) were 58% lower at R48.0 million and the headline loss 
   position was zero, compared with headline earnings of 
   10 South African cents per share (SAc/ps) in the 
   previous quarter.                   
                                                                               
   Q1 2015 VS Q1 2014  

   Operational review                                                          
   Figures for Q1 FY2014 in this results document have been restated to        
   reflect the impact of the application of IFRS 10, IFRIC 5 and IFRS 11       
   and are thus comparable with those for the quarter under review.             
                                                                               
   Gold production for the quarter was up 10% from the 33 597oz                
   recorded in Q1 FY2014. While throughput was down 3% from                    
   6 098 000t, the average yield increased 13% from 0.171g/t. Gold
   sales were up 5%, from 36 394oz.
   
   While cash operating costs were virtually unchanged from the                
   R373 433/kg recorded in Q1 FY2014, all-in sustaining costs dropped          
   2% from R436 954/kg, reflecting higher gold production.                     
   
   Capital expenditure was 68% lower, from R52.3 million, the
   construction of the new high grade section having been concluded.

   Financial review
   Higher gold production and sales, together with a 4% increase in
   the average rand gold price received from R427 604/kg, resulted in
   a 9% rise in revenue from R484.0 million. Although cash operating
   costs were up 11% from R390.2 million, operating profit rose by
   11% from R72.0 million.

   Gross profit rose by 67.5% from R15.3 million and, after accounting
   for expenses and taxation, the loss recorded in the quarter under
   review narrowed by 79% from a loss of R22.2 million.

   The cash operating margin improved from 13% to 15% and the
   all-in sustaining costs margin from -2% to 4%. The all-in cash cost
   margin was higher at 6.7%.

   EBITDA was 86% higher, from R25.7 million, and a headline loss of
   4 SAc/ps improved to a zero headline earnings/loss position.

   Looking ahead
   We are encouraged by the performance of the plant and the early
   results of the FFG test work. These results provide clear guidance on
   the adjustments required to take full advantage of the considerable
   upside that this circuit promises. We remain on track to complete
   test work, and the changes we may have to make, by the end of
   December.

   Niël Pretorius
   Chief executive officer
   24 October 2014

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

                                                                        Quarter       Quarter       Quarter      
                                                                       Sep 2014      Jun 2014      Sep 2013      
                                                                             Rm            Rm            Rm      
                                                                                                  Restated*      
                                                               Note   Unaudited     Unaudited     Unaudited      
Gold and silver revenue                                                   528.5         447.4         484.0      
Net operating costs                                                     (448.8)       (394.8)       (412.0)      
Cash operating costs                                                    (431.7)       (402.5)       (390.2)      
Movement in gold in process                                              (17.1)           7.7        (21.8)      
Operating profit                                                           79.7          52.6          72.0      
Depreciation                                                             (40.0)        (38.9)        (36.4)      
Movement in provision for environmental rehabilitation            7       (2.0)          94.7         (4.0)      
Environmental rehabilitation costs                                        (4.6)         (0.7)        (10.7)      
Retrenchment costs                                                        (5.8)         (1.0)         (2.4)      
Care-and-maintenance costs                                                (3.8)         (3.0)         (5.1)      
Other operating income/(expenses)                                           2.1         (9.0)           1.9      
Gross profit from operating activities                                     25.6          94.7          15.3      
Impairments                                                       3       (2.0)        (51.3)         (0.8)      
Share of losses of equity accounted investments                               –         (0.3)             –      
Corporate and administration expenses                                    (16.1)        (19.1)        (25.2)      
Share-based payments                                                      (1.1)         (1.4)         (0.8)      
(Loss)/profit on disposal of assets                                       (0.4)           1.0             –      
Net finance expense                                                       (7.6)         (4.3)         (6.0)      
(Loss)/profit before taxation                                             (1.6)          19.3        (17.5)      
Income tax                                                                (3.1)        (11.4)         (4.7)      
(Loss)/profit after taxation                                              (4.7)           7.9        (22.2)      
Attributable to:                                                                                                 
Equity owners of the parent                                               (3.3)         (3.8)        (15.6)      
Non-controlling interest                                                  (1.4)          11.7         (6.6)      
                                                                          (4.7)           7.9        (22.2)      
Other comprehensive income
Foreign exchange translation and other                                        –             –           0.5      
Fair value adjustment of available-for-sale investments                     0.8        (55.4)             –      
Total comprehensive income for the period                                 (3.9)        (47.5)        (21.7)      
Attributable to:                                                                                                 
Equity owners of the parent                                               (2.5)        (57.4)        (15.1)      
Non-controlling interest                                                  (1.4)           9.9         (6.6)      
                                                                          (3.9)        (47.5)        (21.7)      
Reconciliation of headline (loss)/earnings                                                                       
Net loss                                                                  (3.3)         (3.8)        (15.6)      
Adjusted for:                                                                                                    
– Impairments                                                               2.0          51.3           0.8      
– Share of losses on equity accounted investments (impairment)                –           0.3             –      
– Loss/(profit) on disposal of assets                                       0.4         (1.0)             –      
– Profit on disposal of associate                                             –         (2.5)             –      
– Non-controlling interest in headline earnings adjustment                (0.1)         (3.6)             –      
– Income tax thereon                                                      (0.1)         (3.3)             –      
Headline (loss)/earnings                                                  (1.1)          37.4        (14.8)      
Headline (loss)/earnings per share – cents                                    –            10           (4)      
Basic (loss)/earnings per share – cents                                     (1)           (1)           (4)      
Diluted headline (loss)/earnings per share – cents                            –            10           (4)      
Diluted basic (loss)/earnings per share – cents                             (1)           (1)           (4)      
Calculated on the weighted average ordinary shares issued of :      379 228 208   379 228 208   379 178 208      


The accompanying notes are an integral part of the condensed consolidated financial statements.
* Refer to note 2 restatements.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                                     As at           As at         As at      
                                                               30 Sep 2014     31 Jun 2014   30 Sep 2013      
                                                                        Rm              Rm            Rm      
                                                                                               Restated*      
                                                          Note   Unaudited         Audited     Unaudited      
Assets                                                                                                        
Non-current assets                                                 1 950.2         1 970.3       2 088.0      
Property plant and equipment                                       1 734.3         1 755.5       1 775.7      
Equity accounted investments                                             –               –           0.3      
Non-current investments and other assets                              36.8            36.9         129.3      
Environmental rehabilitation trust funds and investments             177.7           176.5         181.2      
Deferred tax asset                                                     1.4             1.4           1.5      
Current assets                                                       443.6           470.4         580.1      
Inventories                                                          126.6           147.2         124.9      
Trade and other receivables                                          103.4            99.5         119.0      
Tax receivables                                                        0.3             5.9           5.4      
Cash and cash equivalents                                    4       204.3           208.9         330.8      
Assets held-for-sale                                         6         9.0             8.9             –      
Total assets                                                       2 393.8         2 440.7       2 668.1      

Equity and liabilities                                                                                        
Equity                                                             1 469.9         1 481.2       1 569.1      
Equity of the owners of the parent                                 1 239.2         1 249.1       1 332.9      
Non-controlling interest                                             230.7           232.1         236.2      
Non-current liabilities                                              590.5           652.0         731.0      
Loans and borrowings                                         5           –            75.5          75.5      
Post-retirement and other employee benefits                            9.8             9.3           9.1      
Provision for environmental rehabilitation                           462.7           451.2         537.3      
Deferred tax liability                                               118.0           116.0         109.1      
Current liabilities                                                  333.4           307.5         368.0      
Trade and other payables                                             232.2           211.8         274.6      
Post retirement and other employee benefits                            2.4             2.0           1.0      
Loans and borrowings                                          5       77.5            73.2          92.4      
Liabilities held-for-sale                                     6       21.3            20.5             –      
Total liabilities                                                    923.9           959.5       1 099.0      
Total equity and liabilities                                       2 393.8         2 440.7       2 668.1      


The accompanying notes are an integral part of the condensed consolidated financial statements.
* Refer to note 2 restatements.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                  Quarter         Quarter        Quarter      
                                                                 Sep 2014        Jun 2014       Sep 2013      
                                                                       Rm              Rm             Rm      
                                                                                               Restated*      
                                                                Unaudited       Unaudited      Unaudited      
Net cash inflow from operations                                      86.6            19.3           11.2      
Net cash outflow from investing activities                         (17.9)          (17.4)         (57.1)      
Net cash (out)/in flow from financing activities                   (73.3)             0.3              –      
Loans and other                                                    (73.3)             0.3              –      
(Decrease)/increase in cash and cash equivalents                    (4.6)             2.2         (45.9)      
Opening cash and cash equivalents                                   208.9           206.7          367.7      
Closing cash and cash equivalents                                   204.3           208.9          330.8      
Reconciliation of net cash inflow from operations                                                             
(Loss)/profit before taxation                                       (1.6)            19.3         (17.5)      
Adjusted for:                                                                                                 
Movement in gold in process                                          17.1           (7.7)           21.8      
Depreciation and impairment                                          42.0            90.2           37.2      
Share of losses of equity accounted investments                         –             0.3              –      
Movement in provision for environmental rehabilitation                2.0          (94.7)            4.0      
Share-based payments                                                  1.1             1.4            0.8      
Loss/(profit) on disposal of assets                                   0.4           (1.0)              –      
Profit on the sale of associate                                         –           (2.5)              –      
Finance expense and unwinding of provisions                           9.7            10.5            9.2      
Growth in Environmental Trust Funds                                 (1.3)           (1.2)          (1.1)      
Other non-cash items                                                (2.4)           (3.9)            3.0      
Taxation refund/(paid)                                                4.4           (4.2)              –      
Working capital changes                                              15.2            12.8         (46.2)      
Net cash inflow from operations                                      86.6            19.3           11.2      
   
   
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                                  Quarter         Quarter        Quarter      
                                                                 Sep 2014        Jun 2014       Sep 2013      
                                                                       Rm              Rm             Rm      
                                                                                               Restated*      
                                                                Unaudited       Unaudited      Unaudited      
Balance at the beginning of the period                            1 481.2         1 528.7        1 643.7      

Share issue expenses                                                    –           (0.1)              –      

Increase in share-based payment reserve                               0.2             0.1            0.2      
Net (loss)/profit attributable to equity owners of the parent       (3.3)           (3.8)         (15.6)      
Net (loss)/profit attributable to non-controlling interest          (1.4)            11.7          (6.6)      
Dividends declared on ordinary share capital                        (7.6)               –         (53.1)      
Fair-value adjustment on available-for-sale investments               0.8          (55.4)              –      
Other comprehensive income                                              –               –            0.5      
Balance at the end of the period                                  1 469.9         1 481.2        1 569.1      
       
The accompanying notes are an integral part of the condensed consolidated financial statements.
* Refer to note 2 restatements.

1. BASIS OF PREPARATION
The condensed consolidated financial statements are prepared in accordance with the requirements of the 
JSE Limited Listings Requirements for quarterly reports. The Listings Requirements require quarterly reports 
to be prepared in accordance with the framework concepts and the measurement and recognition requirements of 
International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting Guides as issued by the 
Accounting Practices Committee and Financial Pronouncements as issued by Financial Reporting Standards Council 
and to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting.

The accounting policies applied in the preparation of the condensed consolidated financial statements are in 
terms of IFRS and are consistent with those applied in the previous consolidated annual financial statements, 
except for the adoption of applicable revised and/or new standards issued by the International Accounting Board.

The condensed consolidated financial statements of DRDGOLD Limited for the quarter ended 30 September 2014 
have not been reviewed by an independent auditor.

2. RESTATEMENTS
Impact of changes in accounting policies
The application of standards, amendments to standards and interpretations adopted for the first time did not 
have any effect on the financial position or financial performance of the group.

Impact of applying IFRS 10 and IFRS 11 on the quarterly results
The impact of the adoption of IFRS 10, IFRIC 5 and IFRS 11 (refer below) was not quantified or reported on in 
the quarterly financial statements for the quarter ended 30 September 2013. The results for this comparative 
period ended 30 September 2013 as well as the statement of financial position at these dates have been restated 
with the effects of IFRS 10, IFRIC 5 and IFRS 11 where relevant.
   
i)  The group adopted IFRS11 – Joint Arrangements with an effective date of 1 July 2013. The group's previous 
accounting policy was to proportionately consolidate investments in joint arrangements. With the adoption of 
IFRS 11 – Joint Arrangements the group applies equity accounting and has retrospectively restated the 
comparative information. The group re-evaluated its involvement in its joint arrangement and the investee 
continues to be classified as a joint venture.
    
ii) The group has adopted IFRS 10 Consolidated Financial Statements and has reassessed the control conclusion 
for its investees at 1 July 2013. The group's previous accounting policy was to consolidate the Guardrisk Cell 
Captive as a special purpose entity (SPE) on a line by line basis. With the adoption of IFRS 10 Consolidated 
Financial Statements the Guardrisk Cell Captive is not considered to be controlled by the group and is therefore 
not consolidated with an effective date of 1 July 2013.

The Cell Captive cell # 170, to which DRDGOLD is a shareholder, holds funds that may be applied only towards the 
settlement of the DRDGOLD group's environmental rehabilitation obligations under financial guarantees issued by 
Guardrisk Insurance Company Limited to the Department of Mineral Resources (DMR). The group is therefore considered 
to have a right to the funds held in the Guardrisk Cell Captive and therefore recognised a reimbursive right to these 
funds in the hands of Ergo under IFRIC 5 Interest arising from Decommissioning, Restoration and Environmental 
Rehabilitation Funds.

ADJUSTMENTS TO THE GROUP STATEMENTS OF FINANCIAL POSITION

                                                            Period ended
                                                             30 Sep 2013     
                                                               as stated           IFRS 10 and                     30 Sep 2013
                                                              previously               IFRIC 5        IFRS 11         Restated
                                                                      Rm                    Rm             Rm               Rm
Environmental rehabilitation trust funds and investments           180.8                   0.4              –            181.2
Non-current investments and other assets                           129.2                   0.1              –            129.3
Equity accounted investments                                           –                     –            0.3              0.3
Trade and other receivables*                                       126.3                 (7.3)              –            119.0
Cash and cash equivalents                                          331.3                     –           (0.5)           330.8
Deferred tax liability                                             103.3                   5.8              –            109.1
Trade and other payables*                                          280.8                 (6.0)           (0.2)           274.6
Equity of the owners of the parent                               1 361.3                (28.4)              –          1 332.9
Non-controlling interest                                           214.4                  21.8              –            236.2

                                                            Period ended            
                                                             30 Jun 2013            
                                                               as stated            IFRS 10 and                     30 Jun 2013
                                                              previously                IFRIC 5       IFRS 11          Restated
                                                                      Rm                     Rm            Rm                Rm
Environmental rehabilitation trust funds and investments           177.0                  (2.0)             –             175.0
Non-current investments and other assets                           130.1                    0.1             –             130.2
Equity accounted investments                                           –                      –           0.3               0.3
Cash and cash equivalents                                          377.2                      –         (0.5)             376.7
Deferred tax liability                                             100.7                    5.7             –             106.4
Trade and other payables                                           220.5                  (3.0)         (0.2)             217.3
Equity of the owners of the parent                               1 427.0                 (26.1)             –           1 400.9
Non-controlling interest                                           221.3                   21.5             –             242.8
            
   
* Trade and other receivables exclude tax receivable and trade and other payables exclude post retirement and other 
  employee benefits that were previously reported under one caption respectively.

ADJUSTMENTS TO THE GROUP STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

                                                                  Period ended
                                                                   30 Sep 2013                                     Period ended
                                                                     as stated      IFRS 10 and                     30 Sep 2013
                                                                    previously          IFRIC 5       IFRS 11          Restated
                                                                            Rm               Rm            Rm                Rm
Corporate and administrative expenses                                   (23.3)            (1.9)             –            (25.2)
Loss before tax                                                         (15.6)            (1.9)             –            (17.5)
Income tax                                                               (4.6)            (0.1)             –             (4.7)
Loss after tax                                                          (20.2)            (2.0)             –            (22.2)
Attributable to:  
Equity owners of the parent                                             (13.3)            (2.3)             –            (15.6)
Non-controlling interest                                                 (6.9)              0.3             –             (6.6)
Total comprehensive income for the year                                 (19.7)            (2.0)             –            (21.7)
Attributable to:
Equity owners of the parent                                             (12.8)            (2.3)             –            (15.1)
Non-controlling interest                                                 (6.9)              0.3             –             (6.6)
Earnings per share attributable to equity owners of the parent
Basic loss per share (cents)                                               (4)                –             –               (4)
Diluted basic loss per share (cents)                                       (3)              (1)             –               (4)
Headline loss per share (cents)                                            (3)              (1)             –               (4)
Diluted headline loss per share (cents)                                    (3)              (1)             –               (4)

ADJUSTMENTS TO THE GROUP STATEMENT OF CASH FLOWS
                                                                 Period ended
                                                                  30 Sep 2013                                       Period ended
                                                                    as stated      IFRS 10 and                       30 Sep 2013
                                                                   previously          IFRIC 5         IFRS 11          Restated
                                                                           Rm               Rm              Rm                Rm
Net increase in cash and cash equivalents                              (45.9)                –               –            (45.9)
Cash and cash equivalents at the beginning of the period                377.2                –           (0.5)             367.7
Cash and cash equivalents at the end of the period                      331.3                –           (0.5)             330.8

3. IMPAIRMENTS
The group recorded an impairment of R2.0 million for the quarter ended 30 September 2014 consisting of:
– R1.2 million against cash and cash equivalents incurred on funds with an underlying exposure to securities held in African Bank.
– R0.8 million against the investment in West Wits Mining Limited.

The group recorded an impairment of R51.3 million for the quarter ended 30 June 2014 consisting of:
– R12.4 million against property, plant and equipment.
– R2.7 million impairment reversal against the investment in West Wits Mining South Africa Proprietary Limited.
– R1.4 million against the investment in West Wits Mining Limited.
– R40.2 million against the investment in Rand Refinery Proprietary Limited (refer below).

Impairment of Rand Refinery Proprietary Limited ("Rand Refinery")
Following the adoption of a new Enterprise Resource Planning system in 2013, Rand Refinery experienced implementation 
difficulties which led to a difference between the actual inventory and the accounting records of approximately 87 000oz of gold. 
Due to the  uncertainty around Rand Refinery's inventory and the time it is taking to resolve this matter, the Group has assumed 
that the 87 000oz gold shortfall will not be recovered.

Management therefore estimated the fair value of the investment in Rand Refinery to be zero. The accumulated fair value 
adjustments recognised in Other Comprehensive Income has been reversed and the initial cost of the investment has been 
recognised as an impairment in profit and loss for the period.

4. CASH AND CASH EQUIVALENTS
Included in cash and cash equivalents is restricted cash of R13.7 million (30 June 2014: R13.5 million) in the form of guarantees.

5. LOANS AND BORROWINGS
Included in loans and borrowings is a Domestic Medium Term Note Programme ("DMTN Programme") under which DRDGOLD can issue notes 
from time to time. DRDGOLD raised a total of R165 million under the DMTN Programme in July and September 2012. The different 
unsecured  notes issued mature 12 (R20.0 million), 24 (R69.5 million) and 36 (R75.5 million) months from the date of issue and 
bear interest at the three month Johannesburg Inter–bank Acceptance Rate rate (5.725% as at 30 June 2014) plus a margin 
ranging from 4% to 5% per annum.

On 3 July 2014, DRDGOLD repaid the amount of R73.2 million in capital and interest.

6. ASSETS AND LIABILITIES HELD FOR SALE
In line with the group's strategy to exit underground mining operations, management committed to a plan to sell certain of 
the underground  mining and prospecting rights held by East Rand Proprietary Mines Limited (ERPM), including the related 
liabilities, during FY2014.

On 25 July 2014, DRDGOLD announced that its subsidiaries Ergo Mining Operations Proprietary Limited (EMO) and ERPM had 
collectively entered into an agreement to dispose of certain underground mining and prospecting rights held by ERPM, 
and certain other assets on the related  mining areas, for an agreed consideration of R220 million.

The disposal is subject to the fulfilment of various suspensive conditions including regulatory approvals required for 
disposals  of this nature. A number of these suspensive conditions had not been fulfilled at the date of these condensed
consolidated  financial statements for the quarter ended 30 September 2014.

7. MOVEMENT IN PROVISION FOR ENVIRONMENTAL REHABILITATION
An amount of R2.0 million was charged to the statement of profit or loss for the quarter ended 30 September 2014.

An amount of R94.7 million was credited to the statement of profit or loss for the quarter ended 30 June 2014 resulting from 
a decrease  in the estimated cost to rehabilitate. This is based on the implementation of a different technique to vegetate 
the Crown complex as  well as the increased use of "grey water" in rehabilitation. An updated survey also resulted in a 
decrease of the area to be vegetated.

8. SUBSEQUENT EVENTS
There were no significant subsequent events between the quarter end reporting date of 30 September 2014 and the date of 
issue of these condensed consolidated financial statements.

ALL-IN SUSTAINING COSTS RECONCILIATION (Unaudited)

R million unless otherwise stated                                                         
Net operating costs                                           Sep 2014 Qtr     448.8      
                                                              Jun 2014 Qtr     394.8      
Corporate, administration and other expenses                  Sep 2014 Qtr      15.1      
                                                              Jun 2014 Qtr      29.3      
Rehabilitation and remediation (accretion and amortisation)   Sep 2014 Qtr      11.7      
                                                              Jun 2014 Qtr    (84.2)      
Capital expenditure (sustaining)                              Sep 2014 Qtr      16.6      
                                                              Jun 2014 Qtr      20.4      
All-in sustaining costs*                                      Sep 2014 Qtr     492.2      
                                                              Jun 2014 Qtr     360.3      
Retrenchment costs                                            Sep 2014 Qtr       5.8      
                                                              Jun 2014 Qtr       1.0      
Rehabilitation and remediation                                Sep 2014 Qtr       4.6      
                                                              Jun 2014 Qtr       0.7      
Care-and-maintenance costs                                    Sep 2014 Qtr       3.8      
                                                              Jun 2014 Qtr       3.0      
Capital expenditure (non-sustaining)                          Sep 2014 Qtr         –      
                                                              Jun 2014 Qtr     (0.2)      
All-in costs*                                                 Sep 2014 Qtr     506.4      
                                                              Jun 2014 Qtr     364.8      
All-in sustaining costs (R/kg)                                Sep 2014 Qtr   427 631      
                                                              Jun 2014 Qtr   339 315      
All-in sustaining costs (USD/oz)                              Sep 2014 Qtr     1 237      
                                                              Jun 2014 Qtr       999      
All-in costs (R/kg)                                           Sep 2014 Qtr   440 012      
                                                              Jun 2014 Qtr   343 618      
All-in costs (USD/oz)                                         Sep 2014 Qtr     1 273      
                                                              Jun 2014 Qtr     1 010      


*All-in cost definitions based on the guidance note on non-GAAP Metrics issued by the World Gold Council on 27 June 2013.

ERGO KEY OPERATING AND FINANCIAL RESULTS (Unaudited)#

Ore milled ('000t) (metric) (imperial)                       Sep 2014 Qtr     5 938    6 545      
                                                             Jun 2014 Qtr     6 131    6 758      
Yield (g/t) (oz/t) (metric) (imperial)                       Sep 2014 Qtr     0.194    0.006      
                                                             Jun 2014 Qtr     0.173    0.005      
Gold produced (kg) (oz) (metric) (imperial)                  Sep 2014 Qtr     1 151   37 005      
                                                             Jun 2014 Qtr     1 062   34 143      
Cash operating costs (ZAR/kg) (USD/oz)                       Sep 2014 Qtr   375 044    1 085      
                                                             Jun 2014 Qtr   379 039    1 120      
Cash operating costs (ZAR/t) (USD/t)                         Sep 2014 Qtr        73        6      
                                                             Jun 2014 Qtr        66        6      
Gold and silver revenue (ZAR million) (USD million)          Sep 2014 Qtr     528.5     49.2      
                                                             Jun 2014 Qtr     447.4     42.5      
Operating profit (ZAR million) (USD million)                 Sep 2014 Qtr      79.7      7.4      
                                                             Jun 2014 Qtr      52.6      5.0      
(Loss)/profit before taxation (ZAR million)(USD million) *   Sep 2014 Qtr     (1.6)    (0.3)      
                                                             Jun 2014 Qtr      19.3      4.5      
Capital expenditure (ZAR million) (USD million)              Sep 2014 Qtr      16.5      1.5      
                                                             Jun 2014 Qtr      20.2      1.9      
# Note – The group only has one operating segment – Ergo.
* Note – The difference between the profit before tax on the statement of profit or loss and other comprehensive 
  income relates to corporate head office and all other.

FORWARD LOOKING STATEMENTS
Many factors could cause the actual results, performance or achievements to be materially different from any future results, 
performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, 
adverse changes or uncertainties in general economic conditions in the markets we serve, a drop in the gold price, a sustained 
strengthening of the Rand against the Dollar, regulatory developments adverse to DRDGOLD or difficulties in maintaining 
necessary licenses or other governmental approvals, changes in DRDGOLD's competitive position, changes in business strategy, 
any major disruption in production at key facilities or adverse changes in foreign exchange rates and various other factors.

These risks include, without limitation, those described in the section entitled "Risk Factors" included in our annual 
report for the fiscal year ended 30 June 2013, which we filed with the United States Securities and Exchange Commission on 
25 October 2013 on Form 20-F. You should not place undue reliance on these forward-looking statements, which speak only as 
of the date thereof. We do not undertake any obligation to publicly update or revise these forward-looking statements to 
reflect events or circumstances after the date of this report or to the occurrence of unanticipated events. Any forward-looking 
statement included in this report have not been reviewed and reported on by DRDGOLD's auditors.

DIRECTORS (*British)(**American)                                    
Executives: DJ Pretorius (Chief executive officer)                  
AT Meyer (Acting chief  financial officer)                          
Independent non-executives: GC Campbell* (Non-executive chairman)   
J Holtzhausen, RP Hume, EA Jeneker, J Turk**                        
Company secretary: TJ Gwebu

FOR FURTHER INFORMATION. CONTACT NIËL PRETORIUS AT:
Tel:(+27) (0) 11 470 2600 - Fax: (+27) (0) 11 470 2618
Website: http://www.drdgold.com - Quadrum Office Park - Building 1
50 Constantia Boulevard - Constantia Kloof Ext 28 - South Africa
PO Box 390 - Maraisburg - 1700 - South Africa

Sponsor and Debt Sponsor
One Capital
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